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Letter to the editor

You are free to travel Southwest, Florida's No. 1 carrier

Southwest has gone from a Florida novelty 12 years ago to the top carrier of passengers into, out of and around the state.

By Steve Huettel, Times Staff Writer
Published October 22, 2007

Southwest Airlines has topped Delta as the state's most dominant airline. Why? Florida is the top warm-weather vacation spot for East Coast travelers, whose No. 1 priority is cheap fares.
	[AP photo]

ADVERTISEMENT Graphic: Southwest's share of the market

When Southwest Airlines announced plans to come to Florida 12 years ago, Tampa International Airport's venerable executive director, George Bean, made a bold prediction.

Southwest's new service, starting with a handful of flights from Tampa and Fort Lauderdale in January 1996, would mark the most significant change at his airport since the federal government stopped deciding where airlines could fly and how much they charged in 1979.

His crystal ball was dead on, for Florida and the Tampa Bay area.

The nation's most successful discount carrier now flies more passengers to the Sunshine State and between its six Florida cities than any other airline.

Methodically adding routes and flights in Florida, Southwest has rocked the competitive landscape in one of the nation's biggest and most sharp-elbowed airline markets.

Big network carriers traditionally dominated the state. Delta Air Lines, headquartered in Atlanta, long considered Florida its home turf and in 1998 was the top airline at seven of the state's nine largest airports, carrying one out of every three passengers.

By this year, the tables had turned. Southwest holds the largest market share of domestic passengers at the three largest Florida airports for domestic travelers - Orlando, Fort Lauderdale and Tampa - plus Jacksonville.

Delta and US Airways substantially cut Florida flying in recent years amid bankruptcies and changes in business strategy. Cheap ticket prices pushed by Southwest and smaller discounters surely made the state a much tougher place to compete.

Southwest's $35 average fare from Tampa to Fort Lauderdale in 1996 was 63 percent less than the $110 other airlines charged the year before. Prices have increased. But the airline's average fares in 2007 to Fort Lauderdale ($78), Jacksonville ($75) and Palm Beach ($76) are 16 to 26 percent below what carriers charged in 1995.

It's not clear when Southwest passed Delta as the state's biggest airline. In the first quarter of 2006, Delta and its Delta Connection affiliates flew slightly more passengers, according to OAG Back Aviation Solutions, a national aviation consulting firm.

Southwest was well ahead in the first three months of 2007, with 21 percent of domestic travelers at the state's nine largest airports compared to just more than 14 percent for Delta.

"It's great that who we are and what we are matches the needs of the public in the state," said Lee Lipton, Southwest's director of strategic planning. "But it's just a milestone on a larger journey."

In 2006, Southwest became the largest U.S. domestic carrier with more than 96-million passengers and is on pace to unseat American Airlines this year as the world's biggest airline, measured by passenger traffic.

Florida proved a particularly good match for Southwest. As the prime warm-weather vacation spot for the East Coast, the state attracts millions of travelers whose No. 1 priority is cheap fares. Southwest's low costs makes it possible to make money on some of the nation's lowest fare routes.

The state has large cities spread out by long distances. That gives Southwest, which flies only Boeing 737 jets, a built-in base of customers who would otherwise drive or fly small planes between Tampa, Orlando and South Florida.

The Dallas airline knows the drill well, cutting its teeth in the early 1970s flying between its home city, Houston and San Antonio, dubbed "the Texas Triangle."

"This is the thing Southwest does best, short-haul regional flying," said Stuart Klaskin of KKC Aviation Consultants in Coral Gables. "It's almost all business travelers who book (flights) later. It's bigger revenue flying."

After establishing a beachhead in Florida, Southwest moved into a dozen East Coast markets. First small cities on the edge of Boston, then medium-size markets like Raleigh-Durham, N.C., then big hubs of weakened carriers such as Philadelphia (US Airways) and Dulles International in suburban Virginia outside Washington, D.C. (United). All help feed Florida, usually with nonstop flights.

Delta retains a force in Florida. But the nation's No. 3 carrier decided on a change of course after losing billions in an industry downturn after the Sept. 11 terrorist attacks.

Delta has shifted large aircraft out of domestic service for new, high-yielding international routes to South America and Europe. Much of the capacity came out of Florida. The airline flies just more than 4,000 seats a day through Tampa International, one-third fewer than in October 2003.

"We used to fight to take someone from Buffalo to Orlando," said Robert Cortelyou, Delta's senior vice president of network planning. "We're going after the person coming from Copenhagen to Orlando. The $78, $88, $49 fares - we don't need that. Other carriers can do that more efficiently."

Southwest can make money charging what it once called "peanut fares." On Thursday, the airline reported third-quarter earnings of $162-million for its 66th consecutive quarter in the black.

But Southwest is getting squeezed by higher fuel prices and labor expenses from a senior work force. Its unit cost, the expense of flying an airline seat one mile, increased 14 percent from two years ago - from 7.97 cents in the third quarter of 2005 to 9.08 cents in the same period this year.

Southwest continues to grow its fleet of more than 500 jets, though at a slower pace. Some industry experts say the airline is running out of domestic cities to fly profitably.

CEO Gary Kelly told analysts Thursday the airline will consider selling tickets to destinations in Mexico, the Caribbean and Canada but only on routes flown by partner airlines.

"There's no work under way to fly our own metal internationally," he said.

Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.

Southwest chief to get Jannus award

You can call this year's Tony Jannus Award ceremonies a LUV fest.

The annual award to recognize achievement in commercial aviation will be given Thursday to Colleen Barrett, president of Southwest Airlines. Barrett goes back to the earliest days when Southwest struggled to survive and dressed flight attendants in hot pants. The airline flew out of Dallas Love Field and picked the airport code, LUV, as its symbol on New York Stock Exchange.

Also scheduled to attend the awards at the Tampa Airport Marriott will be Southwest founder and chairman Herb Kelleher and CEO Gary Kelly. Also in attendance will be David Neeleman, chairman of JetBlue Airways, who worked briefly for Southwest after the airline acquired Morris Air, which he co-founded.

The award, in its 44th year, is named for the pilot of the first commercial airline flight on New Year's Day 1914 between St. Petersburg and Tampa.

[Last modified October 22, 2007, 06:40:47]